The Biggest Need In Washington: Courage To Balance Federal Budget

The federal government is paying so much each year in interest on its huge debt that the interest payment exceeds the federal budget deficit.

Or, say it another way:

If the government didn`t have to pay the $150 billion in interest, there would be no budget deficit this year. The government would have a balanced budget. It would be operating in the black, pay as you go.

Quite clearly, this financial disaster feeds on itself. Every unbalanced budget requires more government borrowing which, in turn, requires more interest payments on the government`s staggering debt, now at $2 trillion.

Equally clearly, it must be dealt with firmly by reducing and eventually ending the yearly budget deficits. Unfortunately, the presidential nominees and members of Congress pay lip service to balanced budgets but offer few practical specifics, and fewer real commitments, on how to achieve a balance.

Right now, the government`s yearly interest payments represent 14 percent of all the government`s spending. It has been 40 years since the percentage paid out in interest has been so high, and back in 1948 the reason was legitimate: The nation was paying off the cost of World War II.

In most years since then, the government`s interest payments hovered about 7 percent of its total spending. But starting in the mid-1970s, the percentage began creeping up as the yearly deficits increased. The percentage seems to have stabilized at 14, as the yearly deficits have dropped somewhat since the outrageous $221 billion deficit in 1985.

Fourteen percent, however, is unacceptable. Economist Rudolph G. Penner, former director of the Congressional Budget Office, where he learned more about federal budgets than almost anyone, is decidedly unhappy about the size of the deficit, the interest payments and the pace of correction, even with the ``stabilization`` at 14 percent:

The interest payment, he said, is ``an indicator of the seriousness of the deficit problem. But (the stabilization is) an indicator that we`re slowly correcting the problem -- far too slowly, let me emphasize.``

The Gramm-Rudman trigger mechanisms are helpful in forcing Congress and the administration to reduce the budget deficit, but they`re not enough. Line-item veto power for the president would be much more effective.

What is needed most in Washington is political courage, the willingness to make the necessarily tough decisions to balance the budget. So far, the willingness is present only in rhetoric, not in actions.